PepsiCo reports 'high single-digit' volume growth in Indian beverage market in January-March

PepsiCo on Tuesday reported a "high single-digit growth" in its beverage unit volume in the Indian market during the first quarter of 2024.

The company's convenient food business reported a "double-digit growth" in the country during the period, according to a global earnings statement from the food and beverages major.

PepsiCo's net revenue in the Africa, Middle East, and South Asia (AMESA) division, which covers the Indian market, went up by 2 per cent to USD 1.04 billion.

The growth reflects an "organic volume growth and effective net pricing" and a partial offset of the impact of unfavourable foreign exchange, the company said. In AMESA, PepsiCo's "beverage unit volume grew 2 per cent, primarily reflecting mid-single-digit growth in the Middle East and high single-digit growth in India".

Its convenient food unit volume grew 4.5 per cent, "primarily reflecting high-single-digit growth in South Africa, double-digit growth in India", and offset by a double-digit decline in the Middle East.

However, PepsiCo's operating profit in AMESA declined 10 per cent in the first quarter on account of "certain operating cost increases". This includes a 17 percentage-point impact of higher commodity costs, primarily packaging materials, sweeteners and potatoes, and a 7-percentage-point impact of adjustments related to the sale of a non-strategic brand last year. It has also gained savory snack share in China and India year-to-date, the company said.

Net revenue of PepsiCo, which owns popular brands such as Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew and Quaker, in the first quarter was up 2.26 per cent to USD 18.25 billion.

The growth was led by PepsiCo's international business, which delivered "notable volume improvements versus the previous quarter, as well as strong organic revenue growth and core operating profit growth", said the New York-headquartered multinational.

Chairman and CEO Ramon Laguarta said, "During the first quarter, our businesses remained agile and performed well, with a strong performance from our international business. We delivered a sequential improvement in our volume trends, and year-over-year growth in our net revenue, operating profit margin and EPS, despite the impact of certain product recalls at Quaker Foods North America and a difficult net revenue growth comparison from the prior year." Over the outlook, PepsiCo said it has been consistent with its earlier guidance for 2024 and expects "at least 4 per cent increase in organic revenue".